Binance Raises $500 Million Fund for Crypto Investments

Investment capital continues to pour into the crypto space even as the prices of most cryptocurrencies are at half high.

On Wednesday, Binance Labs, the investment arm of cryptocurrency exchange Binance, announced it was closing a $500 million investment fund with funding from outside firms including DST Global Partners and Breyer Capital.

The fund plans to invest in startups in the crypto space. Since 2018, Binance Labs has invested in around 100 startups including Axie Infinity, Polygon, and Dune Analytics.

Some funds will go towards a program designed to help startups launch. The rest will go to companies that focus on so-called Web 3 activities such as decentralized finance, unusable tokens, and the metaverse.

The announcement of the new fund comes a day after Binance called off a planned $200 million acquisition of US-based media company Forbes Global Media Holdings through a purported acquisition company. especially. Binance announced that deal in February.

Bitcoin and its cryptocurrencies have been in a bear market since last year. According to CoinMarketCap, the market value of the entire sector has dropped from a peak of $3 trillion in February to around $1.3 trillion now.

Bitcoin is down 31% this year through May and 53% from November 9, 2021, to a record $67,802, according to Dow Jones Market Data. According to research firm Visual Capitalist, it has had five deeper sell-offs and three longer ones.

Despite that backdrop, crypto companies have been more flexible in terms of raising capital than the rest of the private market. According to PitchBook, crypto and blockchain-based companies have raised around $15 billion so far this year. That’s close to the pace of 2021, when the sector will raise $32 billion.

Last month, Silicon Valley firm Andreessen Horowitz announced a $4.5 billion crypto fund, its largest to date. The company has about $28 billion in investments, with about $12.7 in raised but still unspent capital, according to PitchBook.

However, fundraising for the rest of the fintech sector has slowed in 2022. According to PitchBook, Fintech companies raised $29.3 billion in venture capital in the first quarter, down 7.3% compared to Q4 2021.

WSJ’s Dion Rabouin explains why Wall Street is betting big on crypto right now and what that means for the new asset class and its future. Photo compilation: Elizabeth Smelov

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